Two interventions that command a lot of attention are microfinance (financial services, particularly small loans, for the very poor) and improved cookstoves (with the hope of reducing air pollution). We’ve recently seen a couple of helpful summaries of relevant research:
- David Roodman summarizes the most rigorous research on microfinance. There are now five randomized controlled trials on microlending that have at least published some preliminary results; it looks like there is very little in the way of direct poverty reduction or wellbeing improvements, though there is positive impact on “stimulating enterprise.”
- Charles Kenny discusses a recent study that randomized heavy subsidies of cookstoves in India, and found that “Households failed to use the stoves regularly or appropriately, did not make the necessary investments to maintain them properly, and use ultimately declined further over time,” leading to no significant positive impact. According to Mr. Kenny, this result is consistent with previous literature on the matter. On the other hand, Aid Thoughts points to another study in Senegal reporting, after one year, that “households receiving an improved cooking stove used less wood, spent less time cooking meals, reported better indoor air quality and (for women, who presumably did all the cooking) were significantly less likely to have respiratory disease symptoms, eye problems. Nearly all recipients of a stove used it at least seven times a week.” We note that the latter study discusses only one-year effects, while the India study found “a meaningful reduction in smoke inhalation in the first year [but] no effect over longer time horizons.” Note that we haven’t carefully examined these papers and that cookstoves are not a focus of ours, but since the recent studies are both fairly rigorous we thought it was worth noting them and their conflicting results for interested readers.